Virtual Library File - Carbon Tracker Unburnable Carbon report

Over 80 % of global coal reserves cannot be burned if the world is serious about limiting global warming to a maximum of 2°C above pre-industrial levels and thus prevent dangerous climate change impa ...

Over 80 % of global coal reserves cannot be burned if the world is serious about limiting global warming to a maximum of 2°C above pre-industrial levels and thus prevent dangerous climate change impacts. Coal mining is connected to serious human rights violations and environmental disasters while coal power plants are polluting air and water, causing negative health impacts and often death. Coal is the main energy resource for many countries across the world and often considered the only option for cheap energy access for the poor. Many governments are heavily subsidizing coal projects, technologies and infrastructure - often with official development assistance budgets. However, the dusk of the age of ‘King Coal’ might be nearer than we think: financial institutions, investors and shareholders alike are realizing that investing in a sunset technology of “unburnable carbon” puts them at high risk while fossil fuel companies are facing emerging litigation risks for the climate change impacts their products are causing and also for their role in actively preventing the implementation of effective climate policies.

Against the background of a limited carbon budget, this report explains why the largest part of oil, gas and coal reserves of the major oil and gas companies are "unburnable carbon", meaning that these reserves need to stay in the ground in order to stay within the 2°C limit. Those assets therefore threaten to form a "Carbon Bubble" with negative impacts on financial markets.